Companies that spend heavily on research and development activities aim to maximize returns on investment through strategic commercialization of their intellectual property (IP). To achieve effective IP management, companies typically focus on distinct processes, such as innovation conception, portfolio maintenance, licensing and infringement searches. Such established operations are central to the consistent, structured and predictable management of a company’s business, especially as other factors (such as the skill level of available personnel) may vary over time.
Process-driven companies usually aim to maximize the objectivity and consistency with which they carry out operational processes. This helps to achieve uniformity and managerial clarity across departments.
It is particularly challenging to develop processes designed to establish and maintain a healthy cycle of innovation, especially in an environment of increasing market competition and continuous introduction of updated and new technologies. The IP innovation cycle can be broadly divided into three phases: value creation, value protection and value extraction, although these are not necessarily carried out in that sequence.
Each of these phases involves a number of functions that are typically assigned to different departments of a company. Each department is responsible for its part of the innovation cycle, and has its own business processes. For example, the research and development department is responsible for generating and documenting innovations, which is part of the value creation phase. During the value protection phase, the legal department performs a rigorous analysis of the documented innovations, and streamlines the research process to enable the company to make profitable investments in IP protection (such as filing patent or design applications and registering trademarks).
Within the value extraction phase, the business development department converts, combines or shapes the innovation into a marketable product or service with an eye to market trends, needs, existing standards and competitors’ offerings. The marketing department then completes the value extraction phase by developing and applying sales and brand-creation strategies to achieve the best possible result for the product or service in the marketplace.
Such a compartmentalized approach efficiently delivers professional expertise required at all three stages of the innovation cycle. However, it also involves risks due to the potential for disconnection between the operation of different departments. For example, the legal department may be unaware of the IP assets in use, and so make costly mistakes during its annual maintenance review. Opportunities may be missed if the invention review process is inconsistent, because the business intelligence team could ignore ideas that may have tremendous commercial viability.
Another challenge of the compartmentalized approach is the difficulty decision makers face in assessing full information from all departments, which is needed for them to perceive, plan and forge the most advantageous path for product and service ideas from conception to commercialization.
These potential pitfalls make it imperative for senior managers to design consistent processes for all departments participating in the innovation cycle.
This integrated outcome can be achieved if the entire innovation cycle is treated as a macro process that drives and connects various micro processes. All concerned departments should be represented during the creation of the overall innovation cycle, and the roles, responsibilities and needs of each should be clearly articulated.
Next, points of communication and connection, dependencies and potential opportunities for beneficial cooperation between different departments should be identified and charted as micro (or level two) processes. At this point, the functions of individual departments and the links between them are defined in detail.
Each process paves the way for those that succeed it, especially early on in the innovation cycle. It is crucial that thorough market analysis and viability checks are carried out and applied at the earliest stages of innovation, helping to prevent mistakes that may later require the whole system to be redesigned.
Once established, an integrated innovation cycle offers ongoing benefits. For example, under such a system a licensing team may be able to spot new revenue opportunities for invention disclosures and share them with the development department to apply to their company’s own product line. This approach ensures that the right people have the right information at the right time to make the best possible decisions.
Outsourcing providers offer process-focused and highly customizable services to help companies establish tailor-made collaborative systems for their IP management needs. Typically, providers conduct an audit of the company’s internal infrastructure; identify inefficiencies; propose modifications to existing processes to incorporate the benefits of collaboration; and provide training and documentation in the workplace to establish the changes and generate awareness of the collaborative approach.
TS Sharat is a senior patent engineer and leads the intellectual property support services unit at Clairvolex Knowledge Processes, a Delhi-based legal outsourcing firm.
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